United Kingdom Inflation

United Kingdom: Inflation reaches lowest rate in five years

October 14, 2014

In September, consumer prices were unchanged over the previous month, which was below the 0.4% increase recorded in August. September’s figure was mainly driven by lower prices for transport as well as for recreation and culture, which offset higher prices for furniture and household goods.

Annual inflation eased from 1.5% in August to 1.2% in September, which marked the lowest rate since September 2009. September’s figure undershot the 1.4% the market had expected. Annual average inflation inched down from August’s 1.9% to 1.8% in September, which is the lowest level since July 2005.

In its latest inflation report from August, the Bank of England projected that inflation would average 1.9% in 2014 and 1.8% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.8% in 2014, which is down 0.1 percentage points from last month’s forecast. For 2015, the panel forecasts that inflation will average 2.0%.

Author:Dirina Mançellari, Senior Economist

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